Regulators close Georgia-based bank

Regulators shut down Omni National Bank in Atlanta on Friday and enlisted SunTrust Banks Inc. to temporarily run its branches and assist depositors.

Omni National had six branch offices, in Atlanta; Dalton, Ga.; Tampa, Fla.; Chicago; Dallas and Houston. It had assets of $956 million and deposits of $796.8 million.

The Office of the Comptroller of the Currency closed Omni National and appointed the Federal Deposit Insurance Corp. as receiver.

It arranged for SunTrust to operate the failed banks branches until April 27. During the 30-day transition period, Omni National customers in Georgia and Florida can either move their accounts to SunTrust or get checks for the amounts in their Omni National accounts. Customers in Illinois and Texas can either close their accounts or have SunTrust send them their remaining balances.

Omni National was the 21^st bank to fail this year, compared with 25 for all of 2008. It had been struggling under the weight of more than $110 million in bad real estate loans, and regulators earlier this month ordered the bank to raise additional capital, improve accounting controls and take other measures to improve its financial stability.

The Comptroller of the Currency said in a press release that it decided to shut down Omni National after finding that it had "experienced substantial dissipation of assets and earnings due to unsafe and unsound practices." It said the bank's losses depleted most of its capital, and said there was "no reasonable prospect'' that it would become adequately capitalized without federal assistance.

The FDIC estimated that the closing would cost its deposit insurance fund around $290 million.

Of the 21 banks that have failed this year, 12 were taken over by institutions whose own balance sheets were strengthened by taxpayer capital from the Treasury Department's $700 billion Troubled Asset Relief Program. SunTrust got $4.9 billion, in two installments.